Indian-Origin Psychiatrist arrested in US over $149 million healthcare fraud

New Delhi: Indian-origin psychiatrist and former CEO of Sovereign Health Group, Dr. Tonmoy Sharma, was arrested by federal authorities in the United States a week ago for his alleged involvement in a massive healthcare fraud case worth around Rs 1,244 crore (US $149 million). This arrest is one of the largest healthcare fraud crackdowns in recent U.S. history.  

The 61-year-old doctor, originally from Assam, who was once a respected psychiatrist and founder of the California-based Sovereign Health Group, was taken into custody at the Los Angeles International Airport on May 29 after being caught red-handed while allegedly preparing to flee to Dubai.

The arrest comes after a federal grand jury indicted him on eight serious criminal charges, including four counts of wire fraud, one count of conspiracy to commit fraud, and three counts of making improper patient referrals in exchange for money. 

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According to the U.S. Department of Justice, Sharma and his company cheated health insurance companies by submitting fake and inflated claims for treatments that were either unnecessary or never provided. 

According to the federal indictment, Sharma submitted over $149 million in fraudulent insurance claims and paid more than $21 million in illegal kickbacks for patient referrals. These payments were disguised as “marketing hours” in contracts and invoices to conceal their purpose. 

As per a TV9 news report, Investigators say some of these patients were even enrolled in health insurance plans without their knowledge, so the company could bill the insurers.

The fraud was so well-organised that it went unnoticed for years. The FBI began investigating Sharma and his company back in 2017. They searched his treatment centres across Southern California, the company’s headquarters, and even Sharma’s house. 

Even though Sovereign Health eventually shut down in 2018, Tonmoy continued operating under a new name- Dana Shores Recovery- using a different license to stay under the radar.

Another person linked to the case, Paul Jin Sen, has also been arrested. He has pleaded not guilty, and his trial is set to begin on July 29. If convicted, both Sharma and Sen could face long prison sentences—up to 20 years for each count of wire fraud, five years for conspiracy, and up to 10 years for illegal kickbacks.

The scam in detail

According to a latest media report by India Today, Sovereign Health staff working at call centres tricked patients by telling them that a fake charity would cover the cost of their treatment. Using this lie, they collected sensitive personal information like birth dates and Social Security numbers. This data was then used to secretly sign the patients up for private health insurance plans, often without their knowledge or permission.

To get these insurance plans approved, Sovereign employees made up false life details and changed income information so it looked like the patients qualified for low-cost coverage. These private plans paid more money than government programs like Medicaid, so the company made bigger profits.

In some cases, Sovereign employees even pretended to be the patients while talking to insurance companies on the phone.

Another part of the scam involved expensive and unnecessary drug tests. Patients were made to undergo both quick tests and detailed lab tests, whether they needed them or not. These tests were processed through Sovereign’s own lab, Vedanta Laboratories Inc., so the company could make even more money.

Insurers were charged for these tests even after the doctors who ordered them had already left the company. To ensure a steady flow of patients, Sharma and his associate paid illegal kickbacks to brokers disguised as “marketing fees”. These brokers were given contracts that falsely described their work, but in reality, they were being paid to refer patients — an arrangement that resulted in over $21 million in illegal payouts.

Who is Tanmoy Sharma?

Born in Guwahati, Assam, Sharma studied medicine at Dibrugarh Medical College in 1987. He completed his internship at Delhi’s Safdarjung Hospital before moving to the UK, and later to the US, where he focused on psychiatry and clinical research.

Sharma is internationally known for his work on schizophrenia and other mental health conditions. He has authored over 200 research papers, written five books, and served as a peer reviewer for 14 global medical journals. He also held advisory roles on international boards overseeing the development of antipsychotic drugs.

His first medical license came from the Medical Council of India in 1987, followed by a license from the UK's General Medical Council in 1988. In his early years, Sharma gained recognition in Britain for his work in pharmaceutical trials.

His fall initially began in UK

News 18 reported that Tonmoy Sharma first rose to prominence in the 1990s for conducting clinical trials for major pharmaceutical companies in the UK. But his reputation began to unravel in 2001 when concerns were raised about irregularities in a £250,000 study comparing Sanofi’s antipsychotic drug Amisulpride with a rival from Eli Lilly.

Sanofi launched a private investigation after their medical adviser, Catherine Baxter, flagged discrepancies in Tonmoy Sharma’s work. The probe uncovered a series of ethics violations which included fabricated approvals from ethics committees, recruitment of vulnerable patients without proper consent, financial incentives to encourage participation and false academic claims, including a non-existent professorship and doctorate.

In 2007, after multiple complaints and an investigation by the UK’s General Medical Council, Tonmoy Sharma’s medical license was revoked. He was found guilty of serious professional misconduct, after which he moved to the United States, where he was arrested for the largest healthcare fraud in the history of the US. 

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